#1
Which of the following is an example of a basic need according to Maslow's hierarchy?
Smartphone
Vacation
Food
Fashion accessories
#2
What does the term 'marginal utility' refer to in economics?
The total satisfaction from consuming a good
The additional satisfaction gained from consuming one more unit of a good
The total cost of producing one unit of a good
The average satisfaction derived from consuming a good
#3
What is the difference between 'cardinal utility' and 'ordinal utility'?
Cardinal utility refers to the ranking of preferences; ordinal utility measures the quantity of satisfaction
Cardinal utility measures satisfaction in absolute units; ordinal utility only ranks preferences
Cardinal utility is used for goods; ordinal utility is used for services
Cardinal utility is outdated, and ordinal utility is the modern approach
#4
What is the concept of 'marginal rate of substitution' (MRS) in consumer theory?
It measures the change in quantity demanded for a good with a change in income
It measures the change in quantity demanded for a good with a change in the price of a substitute good
It measures the rate at which a consumer is willing to give up one good for another while maintaining the same level of satisfaction
It measures the total satisfaction derived from consuming a good
#5
According to the concept of 'elasticity of demand,' what does it mean if the price elasticity of demand is greater than 1?
Demand is elastic
Demand is inelastic
Demand is unitary elastic
Demand is perfectly elastic
#6
In microeconomics, what does the term 'utility' refer to?
The total revenue of a firm
The satisfaction derived from consuming a good or service
The cost of production
The level of government intervention in the market
#7
What is the law of diminishing marginal utility?
As the quantity of a good consumed increases, its marginal utility also increases
The total utility of a good is constant regardless of the quantity consumed
As the quantity of a good consumed increases, the additional satisfaction from each additional unit decreases
The marginal utility of a good is always negative
#8
According to the law of demand, what is the relationship between price and quantity demanded?
Positive
Negative
Zero
Constant
#9
What is the difference between 'total utility' and 'marginal utility'?
Total utility is the sum of marginal utilities; they are the same thing
Total utility is the additional satisfaction from consuming one more unit; marginal utility is the total satisfaction
Total utility is the overall satisfaction from consuming a given quantity; marginal utility is the additional satisfaction from consuming one more unit
Total utility is only applicable to services, while marginal utility is applicable to goods
#10
In consumer equilibrium, what is the significance of the marginal utility-to-price ratio?
It determines the consumer's total utility
It determines the consumer's budget constraint
It helps in maximizing total utility by allocating expenditure efficiently
It is irrelevant in consumer equilibrium
#11
How does a consumer achieve equilibrium in consumption?
By maximizing total utility
By minimizing total cost
By consuming only luxury goods
By avoiding the purchase of essential goods
#12
What is the significance of an indifference curve in consumer theory?
It represents the budget constraint faced by the consumer
It shows the various combinations of goods that give the consumer equal satisfaction
It measures the elasticity of demand for a good
It represents the total utility derived from consuming a good
#13
What is the concept of 'revealed preference' in consumer theory?
Consumers reveal their preferences through surveys and questionnaires
Preferences are revealed by observing actual choices made by consumers
Preferences are revealed through advertising
Governments reveal consumer preferences through regulations
#14
How does a Giffen good behave in terms of demand with changes in price?
As price increases, demand increases
As price increases, demand decreases
As price decreases, demand increases
As price decreases, demand remains constant
#15
What is the concept of 'consumer surplus'?
The excess production of goods beyond consumer demand
The additional satisfaction gained from consuming one more unit of a good
The difference between what a consumer is willing to pay and what they actually pay for a good
The total satisfaction derived from consuming all available goods